Reincorporate

Reincorporate, in corporate law, refers to the process by which a corporation changes its jurisdiction of incorporation, typically moving from one state or country to another while preserving its corporate existence. It is sometimes called domestication or re-domiciliation, depending on the legal framework of the involved jurisdictions. The motive is usually to obtain more favorable corporate laws, tax treatment, or regulatory conditions, or to align the legal domicile with the company’s actual operations.

The process generally requires formal approvals from the corporation’s board of directors and its shareholders. It is effected through filings in the jurisdictions involved, such as articles of domestication and a charter in the destination jurisdiction, along with any required consents or notices under applicable law. Depending on the jurisdiction, the old entity may continue as the same legal entity with the new incorporation status, or it may be dissolved and reconstituted as a new entity. In many systems, the reincorporated entity retains its name and contracts, but its governing law, compliance obligations, and corporate duties may change.

Implications of reincorporation include potential tax consequences and shifts in regulatory obligations, changes in corporate governance structures, and adjustments to reporting and disclosure requirements. Contracts with third parties, creditors, and regulatory authorities may require consents or notices. There are also costs and complexities associated with the transaction, and potential impacts on employee, fiduciary, and creditor protections.

Not all jurisdictions permit reincorporation or domestication, and some impose restrictions or require substantial procedural steps. Alternatives to reincorporation include mergers or consolidations that achieve similar strategic objectives.